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NAMIC Submits Testimony for Hearing on Federal Insurance Office

As we reported last week, the House Financial Services Committee will be holding a hearing tomorrow titled “Capital Markets Regulatory Reform: Strengthening Investor Protection, Enhancing Oversight of Private Pools of Capital, and Creating a National Insurance Office.” The third panel at the hearing will be focused on the future of insurance regulation, specifically on the creation of a Federal Insurance Office.

The Federal Insurance Office closely resembles the Obama Administration’s proposed Office of National Insurance with two main differences. First, it does not grant the office subpoena power for information gathering and second, it changes the name of the Office of National Insurance to the Federal Insurance Office.

NAMIC continues to have serious concerns with the scope and authority of the proposed office – under any name – and has continued to urge Congress to carefully consider any proposal for a new insurance office at the federal level. NAMIC has supported the creation of the Office of Insurance Information, as originally introduced by Subcommittee Chairman Paul Kanjorski, D-Pa., so that federal policymakers have better information about the insurance industry, and confidence in the financial health of property/casualty insurers. The Federal Insurance Office however, goes far beyond the carefully tailored scope of the OII. As currently drafted, this new office would grant the federal government broad authority to establish regulatory standards through international agreements and place it in a supervisory role over insurers and the insurance regulatory system. NAMIC has created a helpful comparison of the differences in the two proposals.

NAMIC will be carefully monitoring this hearing and following up with the committee members and their staff to ensure that Congress does not institute a duplicative and costly regulatory apparatus or dismantle the state-based system of insurance regulation.